Sensex, Nifty struggling to rally: Tuesday closing report

Nifty will now move sideways with an upwards bias that may take it to 6,100

US market plunged Monday after the data showed factory activity in that country expanded in January at the weakest pace in eight months. The weakness spread to Asia and overshadowed the indices back home.  Indian benchmarks had a weak opening on Tuesday and then made an effort to edge higher. The indices managed to shrug off the mood of gloom and turn green in the last hour of the session.


The BSE Sensex opened at 20,051 while the NSE Nifty opened at 5,948. The indices hit its low at 19,963 and 5,933, respectively. Sensex hit a high at 20,256 and closed at 20,212 (up 3 points or 0.01%), while the Nifty hit a high of 6,018 and closed at 6,001 (up 0.90 points or 0.01%). The NSE recorded a volume of 59.30 crore shares.


Among the other indices on the NSE, the top five gainers were PSU Bank (2.01%); Infra (1.45%); Bank Nifty (0.88%); Dividend Opportunities (0.88%) and FMCG (0.84%) while the top five losers were IT (1.84%); Pharma (0.65%); Metal (0.64%); Service (0.12%) and PSE (0.1%).


Of the 50 stocks on the Nifty, 31 ended in the green. The top five gainers were NTPC (3.65%); PNB (3.53%); Bharti Airtel (2.99%); Tata Motors (2.88%) and Ranbaxy (2.49%). The top five losers were HCL Technologies (3.47%); NMDC (3.23%); M&M (3.03%); Gail (2.52%) and Dr Reddy (2.28%).


Of the 1,486 companies on the NSE, 693 companies closed in the green, 705 companies closed in the red while 88 companies closed flat.


The extended part of the Winter Session of Parliament begins on 5 February 2014. The business may conclude on 21 February 2014. The UPA hopes to approve the splitting of the state of Andhra Pradesh into two states as well as a number of anti-corruption bills during the Winter Session of Parliament.


The Ministry of Petroleum and Natural Gas has decided to raise the share of domestic gas to 100% of the requirement for CNG (transport) and PNG (domestic). Accordingly, the price of CNG (transport) in Delhi supplied by Indraprastha Gas (IGL) is reduced by about Rs15 per kg (about 30%). There will also be a reduction of about Rs5/SCM (about 20%) in the price of piped natural gas (PNG) for domestic use. The similar reductions in price of CNG and PNG will take place in other cities with city gas distribution projects.


US indices closed Monday in the negative. Data showed factory activity in the US expanded in January at the weakest pace in eight months as orders slumped. The Institute for Supply Management's factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona-based group's report showed. Readings above 50 indicate expansion.


All the Asian indices which were trading today closed deeply in the red. Nikkei 225 was the top loser falling 4.18%.


The Reserve Bank of Australia kept its key interest rate at a record low 2.5%, after a monetary policy review today. The bank also indicated that it is no longer leaning toward cutting interest rates.


European indices were trading in the red while the US Futures were trading marginally higher.


UK construction expanded at the fastest pace since August 2007 last month as residential activity led a pickup in all areas of building. An index of activity rose to 64.6 from 62.1 in December, Markit Economics said today in London.


NSE asks stock brokers to implement risk reduction mode

When 95% of the broker’s capital is utilised towards margins, he would be compulsorily placed in risk reduction mode from 10th February, NSE says

The National Stock Exchange (NSE) has asked its trading members to ‘compulsorily’ implement a risk reduction mode when 95% of their capital is utilised towards margins.


The move is applicable for the currency derivative segment and would be with effect from 10th February, the Exchange said in a circular.


NSE said, “To enhance the risk management capabilities of the members and to avoid a situation of disablements, a member shall be compulsorily placed in risk reduction mode when 95% of the member’s capital is utilised towards margins”.


The stock broker would be moved back to the normal risk management mode as and when the collateral of the stock broker was lower than 90% utilisation level.


Under this mode, all unexecuted trades would be cancelled when 95% of the stock broker’s collateral available for adjustment against margins gets utilised.


When a member moves to risk reduction mode, fresh orders placed by a trading member to reduce the open positions will be accepted.


Besides, these fresh orders will be checked for sufficiency of margins and those which do not satisfy the criteria will be rejected.


In 2012, the exchange had set the limit for ‘risk-reduction mode’ at 90%.


Jubilant FoodWorks Q3 net profit falls 11% on higher expenditure

During the December quarter, Jubilant FoodWorks, the operator of Domino’s Pizza in India, witnessed it net profit falling on higher expenditure despite a 19% increase in its revenues

Jubilant FoodWorks, which operates fast food chain Domino's Pizza in India, reported an 11% fall in its December quarter net profit despite 19% increase in its total revenues. Its net profit fell 11% due to higher expenditure and further investments in launching its new stores and products.

For the quarter to end-December, Jubilant FoodWorks said, its net profit fell 11% to Rs33.59 crore from Rs37.70 crore while its total revenues, including sales, increased 19% to Rs459.59 crore from Rs385.14 crore, same period last year.

“Inflationary pressures continued to shape key raw material items combined with enhanced expenditure on promotions and advertising, new product launches and new restaurant openings. Expenses related to the roll-out of Dunkin’ Donuts is also being captured in the form of higher total expenditure,” Jubiliant FoodWorks said in regulatory filing.

The company’ raw material costs during the December quarter increased 25% to Rs104.59 crore from Rs83.66 crore a year ago period. Its total expenditure increased 23% to Rs408.76 crore from Rs331.97 crore a year ago period.

Jubiliant FoodWorks, during the December quarter, invested Rs5.25 crore in its wholly owned subsidiary, Jubiliant FoodWorks Lanka Pvt Ltd.

Jubiliant FoodWorks opened 47 new Domino’s Pizza restaurants including its new restaurant concept ‘Pizza Theatre’ in major cities.

Between December 2012 to December 2013, FIIs shareholding in the company grew to 47.38% from 40.80% in a same period a year ago. While domestic institutional investors (DIIs) shareholding fell to 0.03% from 0.15%, public shareholding fell to 2.69% from 3.84% and promoter shareholding fell to 49.90% from 55.21%.

During the quarter, the board of directors of the company approved to increase the investment limit for Foreign Institutional Investors (FIIs) and foreign portfolio investors from 49% to 55% of the paid up equity share capital, which is subject to shareholders’ approval.

As on 31 December 2013, total Domino’s Pizza restaurants stood at 679 across 142 cities and its total number of employees as on 31 December 2013 stood at 26,153 from 20,659 a year ago period.

Jubiliant FoodWorks closed Tuesday 1.45% up at Rs1,095 on the BSE, while the 30-share benchmark Sensex ended the day flat at 20,211.

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